CMSPI’s State of the Industry Report: key findings

Callum Godwin of CMSPI presents the key findings from CMSPI’s State of the Industry Report, sharing pointers for merchants considering the introduction of new payment methods.

Payments consultancy CMSPI has released its second edition of the State of the Industry Report (SOIR). The report is created in partnership with the Insights Advisory Council (IAC), a team of global business thought leaders from Amazon, Best Buy, Etsy, Google, iHerb, Kroger, lululemon, McDonald’s, Shell, Sony, Target, and Walmart. We sat down with Callum Godwin, CMSPI’s Chief Economist, to discuss the inspiration for the report and its key findings.

This year’s State of the Industry Report looks quite different from last year’s inaugural edition. What’s changed?

Last year’s edition focused very much on what payments are today; we felt like there was a gap in the market for a merchant-centric industry report and had the idea of producing an annual State of the Industry Report that would address the concerns of our global merchant clients. Our second edition focuses more on the future of payments – innovation, technological advancement, and digital payments.

We continually hear from merchant clients that enabling new payment options at the checkout is a top strategic priority, so in this year’s report we endeavour to identify the perfect payment method. We believe this year’s edition can help merchants understand the diverse payment landscape, what’s at stake when considering adopting new payment methods, and the strategic levers payment method diversification can offer. It features a scorecard which provides merchants insight into nine different payment methods across payment features, including security, user experience, cost, acceptance, and governance. We know there will be very strong industry opinions on our payment method scoring, and we welcome thoughtful dialogue on our approach.

What characteristics should be contemplated when a merchant is considering introducing a new payment method?

There are many considerations merchants must weigh when introducing new payment methods. In our report, we thought it would be fun to dream a little and imagine what a perfect payment method would entail. So, we sat down with CMSPI’s Insights Advisory Council members and asked what ‘perfect’ would look like for them. We agreed to simplify our analysis into five main characteristics:

• Security – Security is a main concern for all parties involved in a transaction. Under this we take into account how a payment method considers approvals, the presence of an error resolution framework, fraud risk, as well as the brand risk of accepting a certain payment method.
• User experience – A payment method can’t succeed if customers don’t enjoy using it. User experiences like the speed of a transaction, omnichannel acceptance, and cross-border capabilities are all considered here.
• Cost – Cost effectiveness is a must for a successful payment method. Under this characteristic we consider both merchant and consumer costs. Some payment methods with strong interoperability may generate significant user acceptance despite high costs, but those payment types are continually at risk of disruption.
• Acceptance – Ubiquitous acceptance is essential for a payment method to be successful. If merchants don’t accept a payment method, consumers have no reason to change their way and vice versa – if a payment type isn’t popular with consumers, merchants are hard-pressed to see the ROI on enabling it.
• Governance – Governance highlights the need for all stakeholders in the payment system to get a say. Considerations under this characteristic include presence of regulation for both merchants and consumers, the fee setting process, central bank support, and the decision-making balance within standards or quasi-standards bodies.

Which payment method came out on top? 

The exciting crescendo! We looked at nine payment methods and five characteristics: that’s 45 different sub-scores. With all the sub-characteristics, there are 315 sub-scores included in this analysis. Debit cards came out on top this year, which is attributed to their robust security measures, good user experience, and ubiquitous acceptance; however, their scores on cost and governance were below bank transfers, real-time payments, and staged/stored-value digital wallets.

What were your key findings?

USD 236 billion is the amount US merchants paid in card fees in 2024, according to CMSPI estimates. The cost of payments is an area that continues to be a concern for payments. We looked at the cost of other payment methods with a global lens and found BNPL is estimated to cost the most for merchants to accept at 2.77%, followed by stablecoin (1.87%) and credit card (1.67%).

Another staggering figure we found is the amount of ecommerce revenue lost globally to fraud: USD 217 billion in 2024 (Merchant Risk Council 2025 Global Ecommerce Payments & Fraud Report & Worldpay Global Payments Report 2025). With ecommerce continuing to grow, the opportunity for fraudsters to intervene is keeping in step. 

Were there any payment methods that scored higher/lower than predicted?

Pass-through digital wallets scoring second highlights cards’ dominance even in the innovation space. While this may be a different payment method, card-backed digital wallets make up 50% of digital wallet usage, according to Worldpay’s Global Payments Report. I think we were surprised that cash came out quite well. The cost is really quite low despite it being quite labour-intensive and manual to process; cash finishes basically mid-table, which is a bit of a surprise.

Are there any findings from the Scorecard you think may generate some industry controversy?

The topic of stablecoins has become quite popular in 2025. It’s a very nascent consumer-to-business (C2B) payment method and doesn’t have widely accepted use cases in retail yet. However, we wanted to include it because it’s an exciting potential disruptor to retail payments, given its low costs and decentralised governance. And I think we see the development of things like agentic AI – it’ll be interesting to see the role that stablecoin has there, including more control over access to consumer funds and eliminating chargebacks for merchants. So, we could see it rocket up the charts in future years, but it just wasn’t going to score well this year.

How can people get involved with the State of the Industry Report?

Our intention for this document is to bring people together, so we’ve made it available to everyone on the CMSPI website. While the report was developed by merchants with merchants in mind, it also provides valuable information to payment partners looking to gain additional insight into merchant priorities, opportunities, and challenges. We encourage people to reach out to us and ask questions. If you have observations, if you see something you’re not sure about, let’s have a conversation about it. The aim is to bring people together, have discussions, and think about how we can improve the payments landscape.

About the author

Callum Godwin leads a team of accomplished economists whose role is pivotal in maintaining CMSPI’s cutting-edge position in the payments landscape. The Insights team, under Callum’s guidance, spearheads CMSPI’s merchant advocacy and provides strategic consulting services on a global scale. He is an active participant in industry events, frequently sharing his expertise, and regularly contributes thought leadership pieces to both internal and external publications.

 

About CMSPI

CMSPI is a global payments advisory that helps the world’s leading merchants optimise their payments strategy. We combine expert consulting, market visibility, and proprietary analytics to uncover hidden inefficiencies, deliver high-impact savings, drive sales growth, and develop world-class payment strategies.